30/360 Methods
All conventions of this class calculate the Factor as:
They calculate the CouponFactor as:
This is the same as the Factor calculation, with Date2 replaced by Date3. In the case that it is a regular coupon period, this is equivalent to:
The conventions are distinguished by the manner in which they adjust Date1 and/or Date2 for the end of the month. Each convention has a set of rules directing the adjustments.
Treating a month as 30 days and a year as 360 days was devised for its ease of calculation by hand compared with manually calculating the actual days between two dates. Also, because 360 is highly factorable, payment frequencies of semi-annual and quarterly and monthly will be 180, 90, and 30 days of a 360 day year, meaning the payment amount will not change between payment periods.
Read more about this topic: Day Count Convention
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